Understanding CPF Nomination: Why It Matters for Your Estate Planning
CPF nomination is a crucial yet often overlooked aspect of estate planning in Singapore. This article aims to cover all relevant information about CPF nomination, its nuances, and everything you need to know about CPF nomination.
In This Article:
What Does CPF Nomination Covers
Why CPF Matters in Estate Planning
What if You Don't Make a CPF Nomination
Who Can Access Your CPF Account Information
How CPF Savings are Distributed
What if Your CPF Nominee is Still Below Age 18
What is CPF Nomination
The CPF savings in the various accounts (i.e. OA, SA, MA, RA) cannot be included in your Will as they do not form your estate. To choose who your CPF savings should be distributed to when you pass away, you can only do so by making a CPF nomination.
Making a CPF nomination is free. You have the flexibility to decide who should receive your CPF savings upon your demise. Your nominee(s) will also receive your CPF savings more quickly (generally within five weeks), with no fees charged.
Who Can Make a CPF Nomination
You can make a CPF nomination as long as you are a CPF member, at least 16 years old and must not lack mental capacity. Members who are bankrupt or have disabilities (e.g. visual impairment) can also make a CPF nomination.
If you are critically ill and want to make a CPF nomination, it is advisable that a medical practitioner be present with you at the time the nomination is made and also provide a medical certificate stating that you possess the mental capacity to make the nomination.
Do you know? You can make a CPF nomination starting at age 16, insurance nomination at age 18, and make your Will at age 21.
What Does CPF Nomination Covers
✅ [YES] CPF savings* in your Ordinary, Special, MediSave, and Retirement Accounts
✅ [YES] CPF LIFE unused premiums
✅ [YES] Discounted Singtel shares ^
❌ [NO] Properties bought using your CPF savings
❌ [NO] Payout from Dependants’ Protection Scheme (DPS)
❌ [NO] Investments made under CPF Investment Scheme (CPFIS)
* CPF savings cannot be included in your will because they do not form your estate. This arrangement protects your CPF savings from creditor claims on any outstanding debts you may have, and preserves your savings fully for your nominees or family members.
^ If the deceased member had made a valid CPF nomination, his discounted Singtel shares will be distributed to his nominee(s) in the proportion he had indicated in his CPF nomination form. If the deceased member had not made a valid nomination, or had passed away before 1 January 1996, his discounted Singtel shares will form part of his estate (and be distributed according to the Will if there is one).
Source: https://www.cpf.gov.sg/member/infohub/educational-resources/what-does-your-cpf-nomination-cover
Why CPF Matters in Estate Planning
When a Singapore Citizen or PR starts working, CPF contributions by both the employee and employer quickly add up, making CPF a significant asset over time.
This amount should not be ignored especially when considering how you would like to distribute your overall estate upon your demise. According to CPF data as of 31 Dec 2023, the average CPF balance of each member is over S$127,000 and specifically for those age between 45 to 60, it is over S$200,000. This amount is not even including the unused CPF LIFE premiums and continues to grow over time.
With CPF nomination, your CPF savings can be distributed directly to your nominee(s) more quickly as soon as within 17 working days. While not immediate, this still helps provide liquidity to your loved ones who may need them.
Your CPF savings is also protected from creditor claims on any outstanding debts you may have upon your demise (as it does not form part of your estate).
What if You Don't Make a CPF Nomination
If you do not make a CPF nomination, your beneficiaries will receive less of your CPF savings as it will be distributed through PTO which charges an administrative fee and the entire process could take up to six months or more. It also need not necessary be based on Singapore's intestacy rules for distribution.
Without a valid CPF nomination, your CPF savings will be transferred to the Public Trustee’s Office (PTO) for distribution to your family members. This process could take up to six months or more, depending on the time and effort needed to identify and verify your eligible beneficiaries (e.g. providing documentation to prove their relationship with you).
The PTO will distribute your CPF savings according to Singapore's Intestate Succession Act (ISA) or, for Muslims, based on the Muslim Inheritance Certificate under Administration of Muslim Law Act. These might not be who you intended your CPF savings to go to.
The Singapore's ISA states that your movable property is distributed according to the laws of the country where you were domiciled at the time of your death. For most CPF members, this means your savings will be distributed based on Singapore’s intestacy distribution rules. However, if you were domiciled in another country at the time of your death, the intestacy distribution rules of that country applies, which could result in your CPF savings going to different people or in different portions.
Unlike nominated CPF money, which is distributed directly free of charge, the PTO charges an administration fee for distributing your un-nominated CPF money. The fees is based on the amount of CPF money you have. It will be taken from your CPF money and cannot be waived (with a minimum fee of $15).
e.g. if you have S$250,000 of un-nominated CPF Money to be distributed by PTO, the administration fees work out to be S$1,959.
How to Make a CPF Nomination
You can do it online by visiting the CPF nomination page, or you can do it in person by visiting any of the CPF Service Centres. Currently for online nomination, you nominate up to 15 nominees, including organisations, and allocate percentages down to 0.01%. Otherwise, you must do it in person.
CPF online nomination does not take effect immediately upon submission. You will receive notification via SMS and/or email on the status of your nomination.
The CPF Board typically processes your submitted nomination within 4 working days after both your witnesses complete the witnessing of your nomination. As part of internal checks, the CPF Board may contact you for further clarification before recognising it as a valid nomination. In some cases, the CPF Board may refuse to accept your nomination and request you to make a new submission.
Don't leave your CPF nomination the to very last moment.
It’s important not to delay making your CPF nomination. If you pass away before your CPF nomination is recognised as valid, it could lead to complications and confusion for your loved ones. For instance, in the case of [2023] SGHC 55, the deceased who had nominated his estranged ex-wife years prior and tried to nominate his daughter but died before he could do so successfully, resulting in the daughter having to apply to court for a decision on the matter.
Who Can Access Your CPF Account Information
Your CPF account information, including nomination details, remains confidential while you are alive.
Since 1 February 2024, CPF nominees and eligible family members under intestacy laws will be able to access your CPF account information after your passing. This is to enable nominees and beneficiaries under the relevant intestacy laws to settle post-demise matters relating to the deceased members’ CPF accounts with greater ease and transparency.
If you are a CPF nominee, you can view the deceased member's CPF information on the Deceased CPF Member Dashboard by logging in with Singpass.
If you are an eligible family member under the intestacy laws, you can submit a request via FormSG with supporting documents to prove your relationship. The Board will review your request within 10 working days and inform you how to access the deceased member’s CPF account information.
You might want to think twice before including your mistress in your CPF nomination.
Your CPF information will be accessible by your nominees and eligible family member upon your passing and according to CPF FAQ, you cannot prevent or disallow your nominees or family members from accessing your CPF account information upon your demise.
How CPF Savings are Distributed
With CPF Nomination
Your CPF savings (including any unused CPF LIFE annuity premium) will be given to your nominee(s) in cash via cheque or GIRO after your death.
Once CPF Board is notified of your death, CPF Board will contact your nominee(s) within 10 working days and the nominee can then apply to make a withdrawal from the deceased’s CPF account and receive his/her CPF savings in cash or GIRO.
If you are a Singapore Citizen or PR, CPF Board will automatically be notified of your death by the relevant agencies. If you are a foreigner with a CPF account, someone has to report the death at a CPF Service Centre or by post, providing the death certificate, canceled passport, proof of relationship, and other relevant identification documents.
For those who specifically wish to distribute your CPF savings to your nominees’ CPF accounts, you can opt for the Enhanced Nomination Scheme (ENS). Parents who wish to set aside their CPF savings for the long term care of children with special needs may consider the Special Needs Savings Scheme (SNSS). For nomination under the ENS or SNSS, you have to write in to or call CPF for more information.
Without CPF Nomination
If you do not have a valid CPF nomination, your CPF savings will be transferred to the PTO within 17 working days of being notified of your death. The money will be distributed in cash to your family member(s) in accordance with the intestacy laws or inheritance certificate (for Muslims). Your family members will have to apply online through the PTO to receive these funds.
There are situations where the monies are not given directly to the recipients.
If the recipient is of unsound mind, the monies will be handled by their donees or deputies.
If the recipient is bankrupt, the monies will be forwarded to the Official Assignee.
If the recipient is below 18 years old, the monies will be held in trust by PTO until the nominee turns 18.
What if Your CPF Nominee is Still Below Age 18
PTO charges a fee for holding the nominated CPF money in trust for the minor, it is at the same rate as above for the administration of your un-nominated CPF money. The money held in trust for the minor is invested by the Public Trustee according to law and earns interest for the minor from year to year. In addition to the administration fee, whenever interest is to be paid to the minor, a fee is charged on the amount of the interest before the net interest amount (less the fee) is paid into the minor’s trust fund.
For un-nominated CPF Monies which a child is entitled to, it will be held in trust by PTO until the child reaches 21 years old (instead of 18 year old).
What if Your CPF Nominee Passed Away
Your CPF nominee(s) will only receive their share of your CPF savings if they survives you. If the nominee passed away after your death but before they could receive your CPF savings, it will go to the nominee's estate.
If your nominee passes on BEFORE you:
- The deceased nominee's share will be given to surviving nominee(s) in the same proportion you have specified.
- If there are no surviving nominee(s), your nomination is considered revoked, and your savings will be transferred to the Public Trustee’s Office for distribution under the intestacy or Muslim Inheritance laws.
If your nominee passes away AFTER you (before receiving the monies):
- The nominated CPF savings would form part of the deceased nominee's estate and would be paid to the Executor/Administrator appointed under the Grant of Probate (GP)/Letters of Administration (LA).
- If there is no Executor/Administrator appointed, the CPF savings may be paid to a proper claimant if the sum does not exceed $50,000.
Do review and update your CPF nomination periodically.
The CPF nomination you made does not automatically account for your newborn, divorce, or cater for redistributing a deceased nominee's share to substitute nominee.
What happens in the event of simultaneous death?
In the event that two CPF members (e.g. husband and wife) nominate each other and both of passed away simultaneously, the older person is deemed to have died first.
With respect to the older person's CPF nomination, the younger person is still alive and the nominated CPF savings would still be paid to the younger person's estate.
With respect to the younger person's CPF nomination, the older person is deemed to have died and the older person's share of the nomination will be redistributed proportionately to the other surviving nominee(s). If there are no surviving nominee(s) then it will be distributed by PTO based on intestacy of Muslim Inheritance laws.
When Should You Update Your CPF Nomination
You should update your CPF nomination whenever there are any changes to your personal circumstances such as:
- Marriage
- Childbirth
- Divorce
- Death of nominee(s)
Don't forget about your newborn.
There was a case where the children of a deceased person contacted the CPF Board to check why the youngest child did not receive any CPF nomination payout. They wanted to clarify if there had been an administrative mistake. It was then discovered that the deceased had made the CPF nomination before the youngest child was born and had never updated it afterwards.
Similar to a Will, your existing CPF nomination will be revoked upon marriage but not upon divorce.